There could be as many as 230 million electric vehicles on roads worldwide by the end of the decade, if governments continue investing in EVs as part of the plan to tackle climate change.
That figure would see EVs account for about 12 per cent of the global vehicle fleet, meaning about one in every 12 cars on the road would be powered by electricity.
And the United Nations is on board. It wants EVs to become "the new normal" by 2030.
Leaders from 42 countries, including Australia, signed the Breakthrough Agenda at the UN climate change conference, COP26, which called for zero-emission vehicles to become “accessible, affordable, and sustainable in all regions by 2030”.
The target follows a sustained period of explosive growth for electric vehicles, which in some countries now make up 90 per cent of all new-vehicle sales.
Why EVs are the future
According to the IEA’s latest Global EV Outlook, published in April this year, there were 10 million electric cars on the world’s roads at the end of 2020, following a decade of rapid growth.
Electric car registrations increased by 41 per cent in 2020, while global car sales dropped 16 per cent.
Around 3 million electric cars were sold globally, and Europe overtook China as the world’s largest electric vehicle (EV) market for the first time.
Electric bus and truck registrations also expanded in major markets, outlining their suitability for use in the public transport, commercial and industrial sectors.
The IEA report outlined two scenarios for EV uptake through to 2030: a conservative "stated-policies scenario"; and a more adventurous "sustainable-development scenario".
The former is based on existing policies, policy ambitions, and targets that have been legislated for or announced by governments around the world. It predicts EVs will make up about 7 per cent of the global vehicle fleet, with 145 million EVs on roads worldwide.
The latter, however, pushes for universal energy access for all humankind by 2030, sharp reductions in emissions, and the achievement of global climate goals in line with the Paris Agreement.
"In this scenario, the global EV stock reaches almost 70 million vehicles in 2025 and 230 million vehicles in 2030, with EV stock share reaching 12 per cent," the report said.
Why governments around the world are turning to EVs
Governments around the world are increasingly turning to electric vehicles as one method of combating climate change.
Zero-emission vehicles do not emit any greenhouse gases, while the materials and processes used to build and power electric vehicles have a significantly lower environmental impact than vehicles powered by traditional internal combustion engines.
The IEA attributed strong governmental support as a major reason for the rapid adoption of EVs over the past decade.
"Even before the pandemic, many countries were strengthening key policies such as CO2-emissions standards and zero-emission vehicle (ZEV) mandates," it said.
"By the end of 2020, more than 20 countries had announced bans on the sales of conventional cars or mandated all new sales to be ZEVs.
"Additional incentives to safeguard EV sales from the economic downturn were introduced, with some European countries increasing their purchase incentives and China delaying the phase-out of its subsidy scheme."
The number of EV models available to consumers has also exploded, and battery costs have continued to fall.
Neha Palmer, CEO of EV charging infrastructure supplier TeraWatt Infrastructure, described access to electric vehicles as an “environmental justice issue”.
“The shift to electrified transport represents a societal and technological change on par with the industrial revolution, the New Deal and the more recent digitalisation of everything,” he said.
“The effects will have lasting impacts on our economy and built environment.
“Electrification delivers diverse employment across the value chain—including manufacturing, construction, maintenance and operations —and expands opportunities for workers in adjacent and supporting industries."
How to invest in the EV boom
While buying your own electric vehicle is the most obvious way to support the shift to more climate-friendly transportation, costs remain prohibitive in Australia.
But that doesn't mean you can't invest in the EV boom.
There are a number of very well-known EV stocks listed on public stock exchanges, led by American giants Tesla and Nikola, and China's NIO.
Most automakers have also released policies in recent years outlining their shifts to electric. Out of the world’s top 20 vehicle manufacturers,18 have publicly stated plans to rapidly scale up the production of light-duty electric vehicles.
The model availability of electric heavy-duty vehicles is also broadening, with four major truck manufacturers indicating an all-electric future.
Sitting below the pure EV stocks is a huge range of international companies working on EV parts and accessories, and there is no shortage of clean-energy ETFs.
If you're looking to support the industry by investing a little closer to home, ASX-listed resources companies mining the metals required to make the batteries - lithium, copper, cobalt, nickel and rare earths - are a good start.
There are hundreds of listed miners with exposure to these metals, and some of them are making a big impact - Pilbara Minerals sold more than 8,000 tonnes of Lithium for $3,036 per tonne - a 550 per cent increase from last year.
What’s happening in Australia?
If you feel like Australia is being left behind when it comes to electric vehicles, you're not wrong.
The average punter might see the odd Tesla or Prius getting around our cities' suburbs, but Prime Minister Scott Morrison made it clear he would not be “forcing” Australians into electric cars.
Morrison last week announced the Government’s new strategy for zero-emission vehicles, which would work with the private sector to fund 50,000 charging stations in Australian homes.
But the 'Future Fuels' strategy included nothing in the way of subsidies, incentives, sales targets or emission standards.
The strategy was slammed by EV Council CEO Behyad Jafari, who said it ignored the most important and effective measures to improve electric vehicle uptake.
“The strategy will support and accelerate the rollout of some charging infrastructure, however, it does not include subsidies, tax incentives, or sales targets.
“Crucially, it also fails to deliver minimum fuel-efficiency standards, which have been used in the US and Europe for decades. Fuel efficiency standards require car manufacturers to sell vehicles with a combined level of emissions below a defined benchmark, encouraging the sale of zero-emission vehicles."